Secretary of the Treasury Scott Bessent has announced a series of initiatives aimed at addressing widespread government benefits fraud in Minnesota. These measures are intended to improve transparency and accountability for the use of taxpayer funds.
“President Trump has instructed the administration to bring accountability for the hardworking people of Minnesota,” said Secretary of the Treasury Scott Bessent. “Under Democratic Governor Tim Walz, welfare fraud has spiraled out of control. Billions of dollars intended for feeding hungry children, housing disabled seniors, and providing services for children in need were diverted to benefit Somali fraud rings.”
During his visit to the Twin Cities, Secretary Bessent met with representatives from financial institutions, victims of fraud, state officials, and community members. He is also scheduled to participate in a roundtable discussion with affected citizens and lead a meeting involving public-private partnerships. This meeting will include financial institutions as well as Federal, state, and local law enforcement agencies to facilitate information sharing on identifying and investigating government benefits fraud.
According to federal authorities, complex fraud rings have stolen billions from Minnesota’s state programs. The stolen funds have been used for personal enrichment both domestically and internationally, including purchases of real estate, luxury goods, vehicles, aircrafts, and international travel.
The U.S. Department of the Treasury is taking several actions in response:
– The Financial Crimes Enforcement Network (FinCEN) has initiated investigations into multiple money services businesses in Minnesota by issuing four notices requesting information under the Bank Secrecy Act.
– The Internal Revenue Service (IRS) is conducting audits on financial institutions suspected of facilitating money laundering connected to these schemes. The IRS will also form a task force focused on investigating pandemic-era tax incentive abuse and misuse of 501(c)(3) nonprofit status by organizations involved in these social services frauds.
– FinCEN has implemented a Geographic Targeting Order requiring banks and money transmitters in Hennepin and Ramsey Counties—including Minneapolis and St. Paul—to report additional details about certain international fund transfers over $3,000 where beneficiaries are located outside the United States.
– FinCEN has issued an Alert urging financial institutions nationwide to identify and report fraudulent activity related to Federal child nutrition programs. This includes guidance on detecting suspicious transactions linked to such schemes.
– Law enforcement officers in Minnesota have received training from FinCEN on using financial data—including Suspicious Activity Reports—to strengthen their ability to investigate these cases.
These steps are expected to enhance law enforcement’s capacity to prosecute offenders and recover laundered funds sent overseas.
